Roth Capital's Rohit Kulkarni on SpaceX valuation: Biggest question is how does Starlink scale

Added: 2026-05-20

[00:00:00]Joining me now for more on the setup around SpaceX and what investors should be on the lookout for. Rohit Kulkarni is a senior analyst at Roth Capital Partners. Rohit, welcome. Do you have a sense for what this company's business model is?

[00:00:12]There [clears throat] are four layers that we need to unlock here. One is what people know, Starlink satellites. They're selling a monthly subscription for that. Then we also know they have the Falcon 9 launch business.

[00:00:24]So these two make money.

[00:00:26]Not too sure about profitability, but there are those revenue generating businesses. And then there are two kind of cash consumers, I would say.

[00:00:36]Obviously the AI business, which is XAI and many things around it. Twitter, for example. And then you have the Starship business. So I think as we learn about the S-1 filing, I think we'll need to unpack these four layers and what is generating money, how much, over what period, and what needs money over what period of time. [clears throat] So let's let's go over this one more time.

[00:00:59]Starlink, we all know very well, obviously. Although Amazon, again, we spoke with the Delta Airlines CEO about this just the other day. They have Leo coming online. It's going to compete with that. So SpaceX has Starlink. They have Falcon 9, which is its launch franchise. They have Starship, which you're calling a long duration capital program. And then they have XAI and kind of wherever wherever that's going to go.

[00:01:21]Which of these So how Do you get to 1.75 trillion from that?

[00:01:26]There's there's going to be a lot of art and science behind the math of valuation that we'll probably need to do.

[00:01:33]Again, we've been talking to investors and I think what public comps you look at, how you look at the comparables. And there are companies trading at 150 times sales.

[00:01:43]There are subsidiaries in space companies trading at that levels. There are defense tech companies trading at 40 times sales. There are AI infra companies like the one that went public last week trading at trailing 150 times sales. So there are precedents out there that and if you combine all three of them space tech AI tech and [clears throat] futuristic aviation I think you have a conglomeration of of highly valued highly aspirational businesses trading at significant premiums to what we typically see.

[00:02:14]Right. Some of them we could probably just say are more aspirational. Others I mean Starlink, Falcon 9 those are real businesses.

[00:02:21]But again just going back to this question about data centers in space.

[00:02:23]Does that question have to be answered for you to get to the valuations that we're talking about for this IPO?

[00:02:30]I doubt. I think I think what what would probably be the biggest question that people would need to get at is how does Starlink scale? When does it go from consumer to enterprise to kind of anything that moves connectivity. So there is there is a pathway to that.

[00:02:45]While there is more competition coming from Amazon and many of the companies I think the bulk of investor institutional investor focus would be on Starlink in my opinion. And then the true moonshot businesses like Starship and XAI probably if there's a way to box them into what amount of capex they would need I think that would be helpful. So those those would be the two biggest questions. Starlink pathway and kind of the capex for the the big moonshots which is XAI and Starship.

[00:03:14]>> We spoke with Jim Cramer about this yesterday or the day before and you know he he kind of suggested with all of these big IPOs SpaceX, OpenAI and Anthropic it could be leading lambs to the slaughter in terms of the retail public. Do you share concerns that these might be extremely overvalued or going back to the multiples you referenced before do those valuations make sense to you?

[00:03:36]Hard to say about a lot of other companies but SpaceX is once in a generation or probably once in several generation companies.

[00:03:45]The particularly with the layers that we just talked about. Not not many companies have these kind of potential long term kind of possibilities that they have been working on over the last 15 years. And they're coming together in a way that and that nobody anticipated. So, whether this company is worth a trillion or a two trillion on 15th of June, we don't know. But, there's going to be a lot of investor demand, a lot of investor demand from both institutional and retail investors, and probably that that leads them to a pathway of success at least near term.

[00:04:17]Longer term, it remains to be seen.